Jobless rate tops 10% in S.D. County

Uptick in hiring in some industries can't offset losses

For the first time since the early 1980s, San Diego County's unemployment rate surged above the 10 percent mark last month, according to state data released yesterday.

Though there were some glimmers of hope in the employment numbers – including a pickup in hiring in the long-beleaguered real estate and construction industries – there were not enough jobs to keep pace with new entrants to the market.

With a wave of high school and college graduates looking for summertime work, the number of jobless rose by 8,000, pushing the unemployment rate from 9.6 percent in May to 10.1 percent in June – its highest level since the recession of 1982-83.

“We may be starting to skate along the bottom, but we're not able to take care of any new job seekers,” said Marney Cox, economist with the San Diego Association of Governments.

The seasonally adjusted California unemployment rate remained unchanged between May and June at 11.6 percent. Without the adjustment, the unemployment rate in the state – which lost 66,500 jobs – would have jumped from 11.3 percent in May to 11.6 percent last month.

Cox predicted the local jobless rate will climb through July and August but could soften in September, as the economic decline nears bottom and students return to school.

Alan Gin, economist at the University of San Diego, said the local jobless rate could hit 11 percent or 12 percent before it begins to decline next year.

“I don't see a lot of signs of a turnaround,” Gin said.

Hiring was virtually flat in San Diego County in June, with the total number of workers on payrolls throughout the county ending the month at the same number as it began.

There was a burst of summertime hiring at hotels, restaurants, casinos and amusement parks as businesses geared up for tourists. That was offset by layoffs of temporary workers and government employees.

Perhaps the most positive sign in the Employment Development Department's data was that hiring has begun to inch up in the real estate and construction industries – ground zero for the crisis that has gripped the economy. Although both industries remain well below where they were at the height of the housing boom in 2005, they are beginning to show steadier growth.

Real estate firms added 200 workers, the third straight month for hiring gains, as home sales began to pick up. Real estate sales climbed 14 percent between May and June, according to MDA DataQuick, a real estate information firm in La Jolla.

“You can't read too much into month-to-month numbers, but there's some pickup on the sales side, which could explain some minor hiring,” said Gary London, who heads The London Group Realty Advisors in San Diego.

“Sales rates are starting to approach 60 (percent) or 70 percent of the normal rate for long-term trends, although most of those are foreclosures. We're still a long way from getting back to normal,” London said.

Construction companies hired 400 new workers last month – the second month in a row for hiring gains – which was partly because of money from the federal stimulus package funding local infrastructure projects.